Auto Expo2018: How Tata Motors is tweaking its product strategy for CVs

To improve its productivity and profitability further and up its market share, Tata Motors is fine-tuning its product strategy in line with transiting times.Shobha Mathur | Updated: February 12, 2018, 09:15 IST

New Delhi:Girish Wagh recently took over as the Head of the Commercial Vehicle business of Tata Motors. The move gains significance in the backdrop of the company restructuring its automotive business with an eye on growing its commercial vehicles (CV) portfolio that contributes the largest chunk, and a current market share of 44.7 percent.

To improve its productivity and profitability further and up its market share, Tata Motors is fine-tuning its product strategy in line with transiting times.

“With BS-VI coming in, operating economics become significant within a segment. In the small CV category, we see movement happening towards higher payloads, as it is being experienced in light CVs and M&HCVs. So our development effort will span all the segments, especially the changing needs within those segments. We will try to bring products where there are gaps,” Wagh told to ETAuto.

While the M&HCV, intermediate CV and small CV segments have grown in the industry and for Tata Motors, the passenger vertical has de-grown. One of the reasons for this trend is that almost 50 percent of the medium duty buses are bought by state transport undertakings, and this year, this buying has been low and has impacted total business growth.

For Tata Motors, on the small vehicle side, where Magic and Iris are positioned, and controlled by permits, these have witnessed a low growth trajectory. Therefore, the company’s overall passenger vehicle business has declined, except the school bus division.

The company has also been pitching its electric buses in the limelight to boost this business, and is undertaking trials of its 12-metre Star bus electric across the country. With 11 cities coming up with tenders for electric buses under the FAME-I incentive scheme, Tata is gearing up to bid for the tender to deploy them. “We are ready in terms of making electric buses,” assures Wagh.

The CV maker launched more than 35 vehicles in the current fiscal and by the end of the year (2018-19) it will close with 50 launches. This will include besides new models, variants and facelifts.

The company has already announced plans to invest over Rs 1,500 crore (to be funded by internal accruals) over the next 2 years, the chunk of which will be spent on meeting BS-VI norms, new product development, and in productionising these vehicles. For instance, on toolings and in debottlenecking of manufacturing activities.

This capex is expected to consolidate the CV business further.

On the export front, SAARC is its mainstay but Wagh said they also looking at ASEAN, Middle East, North Africa, South Africa, and LATAM geographies, and will be entering them soon.

Products like the Ace, a MHCV, pickups, LCVs and a 3-axle HCV are doing well in some of these regions. Last year, the company exported 62,000 vehicles and this number is expected to rise steadily in the future.

​​This comes as a surprise to the industry as Rakesh was recently elevated to the position of Directo Sales and Marketing which was the third promotion for him in six years of his tenure in the company.